Brenlar Investments, Inc. v. Lynch, A121044 (Cal. App. 1/29/2010)
| Decision Date | 29 January 2010 |
| Docket Number | A121044. |
| Parties | BRENLAR INVESTMENTS, INC. et al., Plaintiff and Respondent, v. HELEN LYNCH, Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
Appeal from the Marin County, Super. Ct. No. CV 052980.
Not to be Published in Official Reports
Defendant and appellant Helen Lynch (Lynch) appeals the judgment entered after a bench trial in favor of plaintiff and respondent Brenlar Investments, Inc., doing business as Frank Howard Allen Realtors (FHAR), on its suit against Lynch alleging equitable indemnity, comparative negligence, contribution and breach of contract arising from Lynch's acts and omissions as a FHAR salesperson in the sale of a Sausalito apartment to Barbara Crane. We affirm in part and remand for further proceedings consistent with this opinion.
FHAR filed the corrected first amended complaint (complaint) on March 30, 2006. The complaint alleged Lynch began working as a salesperson for FHAR in June 1992 and that in her capacity as a salesperson Lynch was at all times an independent contractor and not an employee. The complaint alleged as follows: Lynch agreed to represent Barbara Crane, a 70-year old widow who had never bought a home before, in the purchase of a unit next door to her own in an apartment complex in Sausalito; Lynch had been involved in selling many of the units in the complex and was aware of significant defects, including dry-rot; Lynch concealed from Crane significant defects in the apartment for sale, including active termite infestation, dry rot, damaged siding, an outmoded furnace and an ongoing water leak in the bedroom. Additionally, the complaint alleged Lynch forged Crane's name on a number of disclosures and sales documents to make it look like Crane purchased the apartment with knowledge of and despite these defects.
FHAR's complaint further alleged: After close of escrow Barbara's son Peter Crane discovered substantial undisclosed defects in his mother's apartment requiring repairs estimated at in excess of $250,000; Lynch admitted to Peter Crane she knew the house suffered from dry rot and that there was an active termite infestation in her living room located next door to the Crane apartment. Additionally, the complaint alleged Mrs. Crane filed a lawsuit against FHAR (Crane Litigation) alleging causes of action for concealment, deceit, negligent misrepresentation, breach of fiduciary duties, elder abuse and unfair business practices. In October 2004, according to the complaint, the Crane Litigation was settled at FHAR's expense, with no contribution from Lynch, and the Crane lawsuit was dismissed.
On the basis of these allegations, FHAR asserted four causes of action against Lynch, namely, equitable indemnity, comparative negligence, contribution and breach of contract. In specific regard to its fourth cause of action for breach of contract, FHAR also alleged in the complaint that Lynch entered into a written agreement with FHAR entitled Broker-Salesperson Contract, Independent Contractor (Agreement), a copy of which was attached to the complaint. FHAR alleged Lynch breached the Agreement by the manner in which she handled the Crane real estate transaction, and that as an actual and proximate cause of the breach caused FHAR to suffer damages, "including but not limited to the settlement monies and defense fees and costs incurred and paid by [FHAR]" as a result of the Crane litigation.
Before trial, Lynch filed a motion in limine seeking to sever the issue of whether Lynch was an FHAR employee or an independent contractor from the issues of contract interpretation, liability and damages. Lynch argued that to try the issue of her employment status first would promote judicial efficiency because if the court decided that Lynch was an employee of FHAR, then all FHAR's indemnity claims would fail as a matter of law. FHAR also filed a motion in limine on the issue of Lynch's employment status, seeking to prohibit Lynch from presenting evidence that she was an employee rather than an independent contractor because she failed to raise this defense in her answer or cross-complaint against FHAR. The trial judge denied FHAR's motion in limine, ruling that she expected to hear testimony on Lynch's employment status because, The trial judge also denied Lynch's motion in limine because, "This is going to be a five-day trial, . . . and I think that to sever out that issue is not a good use of our resources."
Barbara Crane testified she was represented by her son Peter Crane in the suit she filed in June 2003 against FHAR and Helen Lynch (Crane litigation). Crane confirmed that on September 27, 2004, she signed an agreement to settle the case for $150,000. Crane testified that when she purchased the apartment she was 70 years old, widowed, and it was the first real estate transaction she had ever handled by herself. Crane said she was "not thrilled [about purchasing] the property" because it was on a hill and that she had many reservations about completing the transaction.NC
Crane testified she had complete trust in Lynch as her real estate agent in the purchase of the apartment. Crane stated she understood Lynch had a duty to act in Crane's best interest in the purchase of the apartment, and to exercise the "upmost (sic) care, integrity, honesty, loyalty and due diligence in her dealings with [Crane]." Crane also acknowledged Lynch had a "duty to investigate all material facts which might affect the property's desirability and value," a duty to "fully disclose . . . all pertinent facts having to do with the property," and a duty to "advise [Crane] on conducting physical inspections of the property."
Crane agreed that it would be dishonest for someone to sign her name or initials without her authorization. Crane acknowledged that on a couple of occasions when Lynch contacted her to sign paperwork she gave Lynch permission to initial them on her behalf because Lynch said the papers were not that important. Crane testified she also authorized Lynch to sign her name and was impeached with deposition testimony in which she stated she only authorized Lynch to initial but "the signature ones I always sign myself" and she never authorized Lynch to sign her name. Crane stated she did not recall the exact number of documents Lynch initialed for her and that Lynch signed a few documents without her authorization.
Crane acknowledged deposition testimony in which she stated there had been "irregularities" in the purchase of the apartment, one of which she identified concerned the city inspection report: Crane answered in her deposition that Crane was shown a City of Sausalito building inspection report dated July 21, 2001 purporting to carry her signature. Crane said it was not her signature. Crane said she got the report later from Lynch. Crane agreed Lynch gave false testimony in her deposition when Lynch said she never signed or initialed any documents for Crane. Crane confirmed that after Lynch's deposition, she filed a second amended complaint adding allegations of forgery and elder abuse based on "forging plaintiff's signature on and/or failing to provide plaintiff several of the transaction documents including important disclosures about the property."
Crane identified all the initials and signature on the residential purchase agreement were made by her. Crane also identified her signature on the settlement agreement for the Crane litigation. Crane testified that the signature on an earthquake disclosure form is not her signature; she does not know who signed her name. The signature on a tax bill Crane received from Lynch is not Crane's signature but she does not know who wrote it. When presented with a document entitled satisfaction or waiver of contingencies, Crane stated she was unsure whether it contained her signature or initials but acknowledged her deposition testimony in which she stated the initials under "examination of title" were not hers and under "inspections of physical condition" were not hers. Regarding the national hazards disclosure report, Crane said it was not her signature on it. Crane did not write her signature on the city inspection report. The California Land Title of Marin preliminary report was not signed by Crane and she did not know who put her signature on it.
Crane was presented with the residential purchase agreement under which paragraph 22A provides the buyer will have the right to retain at his or her expense licensed experts including contractors to conduct inspections and furnish reports. Crane never told Lynch prior to the close of escrow that she wanted to waive her right to a contractor inspection or any other inspection of the physical condition of the apartment. The satisfaction or waiver of conditions showed Crane waived her right to inspections but Crane did not discuss the matter with Lynch, according to Crane's deposition testimony.
Crane testified that she signed the "satisfaction/waiver of contingencies" form but did not initial the boxes for approval of all inspection reports on physical condition of the property. The initials "B.C." beside the term "buyer approves all inspection reports obtained in accordance with this contingency" were not made by Crane. Crane acknowledged that prior to close of escrow Lynch never advised her that the seller had disclosed in the state mandated earthquake disclosure that the seller did not know whether the house was anchored or bolted to the foundation, or whether the exterior walls were braced. Crane stated she thought Lynch showed her this form and was then impeached with deposition...
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